How To Structure This Deal?
I am looking for ideas on how to structure a pre-foreclosure purchase that would work for both parties.
I have a very good friend out of state from me who I trust 110%. He is in the process of setting up a development company and is purchasing residential lots in an up and coming area that is experiencing appreciation and should continue to do so for a while to come.
We have talked about letting me purchase one of the first homes he builds to use as a rental. I would obviously purchase at a discount, so I should walk into the property with equity. I would like to try and do this deal with close to 100% financing if possible. (ficos 750-800) He would in turn have a home sold before he even breaks ground, a big plus for him. He would then manage the rental for me, seeing that he is located in the area. Being a new home, maintenance and up keep would be low for a while.
How can we structure this to work for both of us? I am not even quite sure what questions to ask. I guess I am looking to get pointed in the right direction. Not sure how much of a discount I should be looking for. What are the pros and cons?
What concerns should I have now that I am in the early stages?
Any ideas or input would be greatly appreciated.
It will be in the area of about $250,000.
Thanks to all in advance,
Don
Should this have been posted on the residential side?
Thanks Chris for the reply.
First, your right, I had a typo, I meant pre-constrution, I must have had forclosures on my mind when I postsd this.
I am not sure what you mean by my friend having 100% equity. He will be using financing to build this particular home.
I guess what I really need to know now is rental and vacancy rates for that area.
Don
Click the "Residential" button on the top left, click "Forums" and then go into the "Foreclosure Fourm". Read a year or so of posts and you will get enough advice to pose questions specific enough to encourage expert answers.
Good Luck!
Chris